LegalZoom.com, Inc. v. Rocket Lawyer, Inc.

Filing 13

MOTION for Relief from Nondispositive Pretrial Order of Magistrate Judge filed by LegalZoom.com, Inc.. Responses due by 4/20/2015. Replies due by 4/27/2015. (Attachments: # 1 Appendix of Exhibits)(Allan, Aaron) (Filed on 4/6/2015)

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PATRICIA L. GLASER - State Bar No. 55668
[e-mail]
FRED D. HEATHER - State Bar No. 110650
[e-mail]
AARON P. ALLAN - State Bar No. 144406
[e-mail]
GLASER WEIL FINK HOWARD
AVCHEN & SHAPIRO LLP
10250 Constellation Boulevard, 19th Floor
Los Angeles, California 90067
Telephone: [phone]
Facsimile: [phone]
Attorneys for Plaintiff
LegalZoom.com, Inc.

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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LEGALZOOM.COM, INC.,

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Plaintiff,

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v.

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ROCKET LAWYER INC.,

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Defendants.

CASE NO: 5:15-mc-80003-NC
PLAINTIFF, LEGALZOOM.COM,
INC.’S MOTION FOR RELIEF
FROM NONDISPOSITIVE
PRETRIAL ORDER OF
MAGISTRATE JUDGE
Before: Hon. Lucy H. Koh

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MOTION FOR RELIEF FROM NONDISPOSITIVE PRETRIAL ORDER
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I.

INTRODUCTION
LegalZoom.com, Inc. (“LegalZoom”) has sued one of its competitors, Rocket Lawyer, for

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false advertising and unfair competition in connection with Rocket Lawyer’s use of the term “free”

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in its internet and search engine advertising. That action is pending in the Central District of

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California before Magistrate Judge John McDermott, sitting by consent as a result of the recent

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retirement of Judge Gary Feess (the “CD Action”). This appeal is from a ruling of Magistrate Judge

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Nathaniel Cousins, denying LegalZoom’s motion to compel third-party Google, Inc. to produce

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documents in response to four categories set forth in a subpoena. Because the document categories

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were narrowly drawn, because the requested documents were essential and highly relevant to the

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CD Action, because LegalZoom took reasonable steps to narrow the scope of the documents being

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sought and the manner of production, and because Google’s counsel refused to engage meaningfully

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in the meet and confer process (and in fact refused to discuss or attempt to resolve any “burden”

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associated with producing the requested documents), the motion to compel should have been

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granted. LegalZoom respectfully submits that Judge Cousins’ order was based on an erroneous

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application of the governing legal standard and should be set aside.

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II.

BACKGROUND
While Judge Feess was still presiding over the CD Action, there was a dispute brought

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before him based on Rocket Lawyer’s last-minute production of certain highly relevant documents

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while the parties were in the midst of briefing summary judgment motions. Included within that

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production were documents showing that Google had complained to Rocket Lawyer about its

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advertisements being in violation of certain Google policies. As a result, Judge Feess vacated a

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summary judgment hearing date and the trial date, and specifically permitted LegalZoom to obtain

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document discovery from Google as follows: “Document Subpoenas. . . .relating to Google’s

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inquiry into Rocket Lawyer’s free advertisements.” See Appendix, Tab 3, at Ex. A. LegalZoom

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served a subpoena to Google, requesting four categories of documents based on the language in

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Judge Feess’ order.1

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(1) Any and all DOCUMENTS RELATING TO ROCKET LAWYER FREE
ADVERTISEMENTS between January 1, 2008 to the present; (2) Any and all

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MOTION FOR RELIEF FROM NONDISPOSITIVE PRETRIAL ORDER
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Google refused to produce any documents in response to the subpoena, and Google’s

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counsel frustrated all attempts by LegalZoom to meet and confer to resolve any perceived burden.

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The meet and confer process spanned fifteen (15) days, including ten (10) separate emails and

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letters, and at least 3-4 telephone calls. During that process, LegalZoom made multiple attempts at

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compromise including to (1) “alleviate any burden associated with locating and producing

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responsive documents;” (2) limit the time/scope of subpoenas to January 1, 2010 through December

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31, 2013; (3) “extend out the. . . .production date;” (4) provide additional information requested by

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Google “to assist [its] search;” and (5) consider “other proposals” that are less burdensome. See

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Appendix, Tab 3 at Ex. D to I (highlighted portions evidencing the reasonable steps taken by

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LegalZoom to eliminate Google’s burden).
Ultimately, in rejecting all of LegalZoom’s efforts at compromise, Google continually

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claimed it would be unfairly burdensome to make it search for and produce any documents. But

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when Google’s counsel was asked to discuss the issue of burden during a telephone conference on

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December 18, 2014, he refused to engage on that subject, protesting “this is not a deposition.” Id. at

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Appendix, Tab 3, Ex. I. Instead, he provided LegalZoom with an ultimatum, requiring LegalZoom

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to withdraw a deposition subpoena served on that counsel’s separate client Michael Margolis, who

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had authored a usability study commissioned by Rocket Lawyer. Id. When LegalZoom refused to

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accept that ultimatum, negotiations broke down and LegalZoom was forced to pursue this motion to

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compel. Even at the hearing on this motion, Google’s counsel failed to articulate Google’s burden.

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Based on the above record, Judge Cousins’ ruling that LegalZoom did not meet its burden of

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establishing that it took “reasonable steps” to avoid imposing an undue burden on non-party Google

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was clearly erroneous. LegalZoom respectfully requests that this Court overturn Judge Cousins

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Order, and make a new Order requiring that Google provide responsive documents.

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COMMUNICATIONS between YOU and ROCKET LAWYER RELATING TO ROCKET
LAWYER FREE ADVERTISEMENTS between January 1, 2008 and present; (3) Any and all
26 DOCUMENTS RELATING TO studies managed or performed by Google Ventures for ROCKET
LAWYER, to the extent those studies examine or concern ROCKET LAWYER FREE
27 ADVERTISEMENTS; and ( 4) Any and all DOCUMENTS sufficient to show the complete name,
address, and telephone number for Katherine K, whose email address is [e-mail].
28 See Appendix, Tab 2, at Ex. A.
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II.

STANDARDS FOR REVIEW

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When a party objects to a magistrate judge's ruling on non-dispositive matters, such as

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discovery orders, a district court must assess whether a magistrate judge's decision was clearly

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erroneous or contrary to law based on the facts actually before the magistrate judge. Tafas v. Dudas,

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530 F. Supp. 2d. 786, 792 (E.D. Va. 2008). The Rule 26 relevancy standard applies to subpoenas to

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non-parties. Beinin v. Ctr. For Study of Popular Culture, No. 06-cv-02298 JW (RS), 2007 WL

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832962, AT *2 (N.D. Cal. Mar. 16, 2007). Reasonable steps must be taken “to avoid imposing

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undue burden or expense on a person subject to the subpoena.” Fed. R. Civ. P. 45(d)(1). Even if a

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subpoena to a non-party seeks relevant information, the Court must limit discovery if “the discovery

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sought…can be obtained from some source that is more convenient, less burdensome, or less

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expensive” or if “the burden or expense of the proposed discovery outweighs its likely benefit. Fed.

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R. Civ. P. 45(d)(1); Fed. R. Civ. P. 26(b)(2)(C)(i).

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III.

JUDGE COUSINS’ RULING WAS A CLEARLY ERRONEOUS

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APPLICATION OF THE “REASONABLE STEPS” REQUIREMENT

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1.

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The Record Shows That LegalZoom Took Reasonable Steps To Prevent
Undue Burden Or Expense

Judge Cousins states in his Order the rule that a party responsible for issuing a subpoena

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must take “reasonable steps to avoid imposing undue burden or expense on a person subject to the

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subpoena.” Fed. R. Civ. P. 45(d)(1). His denial of LegalZoom’s Motion to Compel was based solely

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on an erroneous finding that LegalZoom did not adhere to this requirement. As stated above,

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LegalZoom took reasonable steps to avoid any burden to Google by offering to: (1) “alleviate any

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burden associated with locating and producing responsive documents;” (2) limit the time/scope of

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subpoenas to January 1, 2010 through December 31, 2013; (3) continually “extend out the. .

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.production date”; (4) provide additional information requested by Google “to assist [its] search;”

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and (5) consider “other proposals” that are less burdensome. See Appendix, Tab 3, at Ex. D and E.

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LegalZoom repeatedly narrowed and offered compromise, and offered to “work with” Google to

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reduce any burden. Id. at Appendix, Tab 3, Ex. E. LegalZoom also encouraged “further dialogue”

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in hopes of “a resolution short of court involvement.” Id. at Appendix, Tab 3, Ex. G. Despite these

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numerous attempts, Google refused to (a) identify any burden, or (b) discuss it. Appendix, Tab 3 at

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Ex. I (“When I asked about the burden associated with producing. . . .materials, you refused to

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provide. . . .any answer (or to even engage) on that subject. When I attempted to further meet and

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confer on that subject, you refused to engage.”). Google’s refusal to identify or discuss its alleged

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burdens obstructed LegalZoom’s ability to take any steps (let alone reasonable steps) to mitigate any

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burden on Google.

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Google, as the party opposing discovery on the basis of undue burden or expense, had the

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burden to show that such burden or expense was unreasonable compared to the benefits of its

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production. See N.L.R.B. v. Vista Del Sol Health Services Inc., 40 F. Supp. 3d. 1238, 1265 (C.D.

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Cal. 2014) (finding “[a] court will not excuse compliance with a subpoena for relevant information

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simply upon the cry of ‘unduly burdensome.’”); see also Manning v. General Motors, 247 F.R.D.

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646, 654 (D. Kan. 2007) (defendant failed to adequately support its claim of undue burden by failing

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to provide evidence showing expenditure of time, effort, or money necessary to produce requested

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documents). There is nothing in the meet and confer letters from Google that identified the nature of

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the burden or costs associated with collecting and producing these categories of documents. Google

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also failed to identify or provide any evidence at the hearing or during the parties’ meet and confer,

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that producing responsive documents would require an undue burden. Judge Cousins erred in not

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holding Google accountable for its failure to articulate any burden.

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2.

Judge Cousins Erroneously Applied The “Reasonable Steps”
Requirement

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In finding that LegalZoom did not take reasonable steps to prevent undue burden and

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expense, Judge Cousins relied solely on the argument that LegalZoom’s Motion did not specify the

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“gaps” that production from Google would fill, so as to avoid burdening Google with a need to

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produce documents already produced by, or in the possession of, Rocket Lawyer.

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There are at least two problems with this aspect of Judge Cousins’ ruling: (1) LegalZoom

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does not know what Google has in its files which is distinct from what Rocket Lawyer already

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produced, and LegalZoom cannot simply identify categories that Rocket Lawyer produced (e.g.,

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correspondence with Google) because that could easily result in Google not producing highly

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probative documents that were not produced by Rocket Lawyer; and (2) Judge Cousins' Order
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would seem to require that LegalZoom first provide Google with copies of all the documents that

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Rocket Lawyer already produced so that Google could perform its own "cross-check" in order to

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avoid duplication, but that would INCREASE,rather than decrease, the burden on Google because it

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would then require Google to compare Rocket Lawyer's documents with its own internal

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documents. A less burdensome option for Google would be simply to produce all documents

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simply have requested and obtained reimbursement. See e•~• Standard Chlorine of Delaware, Inc. v.

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Sinibaldi, 821 F. Supp. 232, 263(D. Del. 1992)(moving party can be ordered to advance costs to a

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claim never made by Google, and highly doubtful given the categories at issue), then Google could

nonparty); U.S. v. Columbia Broadcasting System, Inc., 666 F.2d 364, 371-72(9th Cir. 1982)

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By finding that LegalZoom did not take reasonable steps to prevent undue burden, Judge

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Cousins' Order actually endorses a more burdensome protocol for third-party discovery upon

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Google. This is clearly an erroneous application, and ignores both the reasonable steps LegalZoom

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undertook to mitigate burden and expense during its meet and confer conferences, and the

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unreasonable responses of Google, which frustrated those efforts.

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IV.

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For the reasons stated herein, LegalZoom requests this Court grant this Motion for Relief

CONCLUSION

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from the Nondispositive Pretrial Order by Judge Cousins, and that this court grant LegalZoom's

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Motion to Compel Compliance with its Subpoena Against Google.

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DATED: April 6, 2015

GLASER WEIL FINK HOWARD
AVCHEN & SH PIRG LLP

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By:
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AARON P. ALLAN
Attorneys for Plaintiff
LegalZoom.com, Inc.

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